Stocks, Bonds Rise as Weak Jobs Bolster Fed Bets
A rally in the world’s largest tech companies drove stocks higher as bonds rebounded after weak jobs data validated wagers the Federal Reserve will resume cutting rates in September.
Equities extended gains and bond yields fell after data showed US job openings fell in July to the lowest in 10 months, reinforcing bets on at least two Fed reductions in 2025. Following a two-day slide, the S&P 500 also gained amid a court victory for Big Tech that saw Alphabet Inc. surging 8% as Google dodged a sale of its Chrome web browser.
Treasuries rose after a slide that drove the 30-year yield close to 5% amid investor concerns about global fiscal outlooks and a slew of corporate debt sales.
Borrowers are rushing into the bond market, with more than $116 billion of sales so far this week, and investors are lapping up the new debt. In the US, 20 issuers are considering new high-grade bonds, according to an informal survey of debt underwriters.
Just a few days ahead of the all-important jobs report, private-sector data pointed to incremental loosening of the labor market.
Fed Governor Christopher Waller told CNBC the US central bank should begin lowering interest rates this month and make multiple cuts in the coming months, but is open to a debate on the precise pace of reductions.Stocks bounced after having started September on a sour note amid lofty technology valuations and concerns about global fiscal budgets
“If anything, add on weakness,” said Steve Chiavarone at Federated Hermes. “If you cut away the noise and volatility, I’m not going to bet against the US market in an environment where earnings are growing, estimates are accelerating, economic data is good and rates are going to come down.”
HSBC strategists increased their year-end target for the S&P 500 for the second time in a month, citing a boost from better-than-expected quarterly earnings.
Sumber: Bloomberg
